Infrastructure Development in Asia: 12 Things to Know

Developing countries in Asia and the Pacific need to invest $26 trillion in infrastructure from 2016 to 2030, or $1.7 trillion per year, if the region is to maintain its growth momentum, eradicate poverty, and respond to climate change, according to the Asian Development Bank report, Meeting Asia's Infrastructure Needs.

Infrastructure in developing countries in Asia and the Pacific has improved rapidly but remains far from adequate. More than 400 million Asians still lack electricity; roughly 300 million have no access to safe drinking water and 1.5 billion lack basic sanitation. In many countries, power outages constrain economic growth. City traffic congestion alone costs economies huge amounts daily in lost productivity, wasted fuel, and human stress.

Developing countries in Asia will need to invest $26 trillion in infrastructure from 2016 to 2030, or $1.7 trillion per year, if the region is to maintain its growth momentum, eradicate poverty, and respond to climate change, according to the Asian Development Bank report, Meeting Asia's Infrastructure Needs.

Between 2016 and 2030, the region needs to invest $14.7 trillion for power, $8.4 trillion for transport, $2.3 trillion for telecommunications, and $800 billion for water and sanitation improvements.

East Asia accounts for 61% of the investments needed through 2030.

As a percentage of gross domestic product, the Pacific requires investments valued at 9.1% of GDP, with South Asia at 8.8%, Central Asia at 7.8%, Southeast Asia at 5.7%, and East Asia at 5.2%.

In terms of sectors, power accounts for 56% of needed infrastructure investments with transport 32%, telecommunications 9%, and water and sanitation accounting for 3%.

The costs of mitigating climate change in Asia and the Pacific are estimated at $200 billion per year. This primarily comes from investments in the power sector, including in renewable energy, smart grids, and energy efficiency.

In the transport sector, shifts from more carbon-intensive modes of travel (private cars) to less carbon-intensive modes (public transit and railways) will require supportive policies and regulations as well as investments.

The costs of climate proofing are estimated at $41 billion annually with most of that – $37 billion – going toward transportation investments, including climate-proofing roads and elevating road embankments to protect from flooding.

Multilateral development banks like ADB have an important role to play in public and private sector infrastructure financing. ADB is scaling up its operations by 50% from $14 billion in 2014 to more than $20 billion in 2020, with 70% of this amount for sovereign and non-sovereign infrastructure investment.

A growing proportion of ADB finance is expected to go to the private sector. ADB is also working with bilateral donors and providers of private foreign capital.

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